The Rise of Investing in Real Estate Online
Times are changing. Back in the day, you walked the streets of town with a realtor, toured a house or two, and put in your offer to buy a home. Now, real estate investors are buying properties online through various turnkey solutions — all from the comfort of their kitchen table or living room sofa.
You don’t even have to own property outright to invest in real estate anymore. Now, investors (big and small) can purchase shares in real estate investment trusts (REITs) like Fundrise or Roofstock to diversify their portfolios. You can even use a platform like Nomad to buy a property with a guaranteed rent-paying tenant signed up before you pay any bills.
Investing in real estate digitally is on the rise, and it’s giving investors (and would-be investors) more options than ever. Crowdfunded deals (also known as real estate syndication) reached an all-time high after the pandemic, representing $15 billion in 2020 (up from $7 billion in 2019). Notably, this was for online syndications — not necessarily traditional, offline syndications. Offline syndications dropped by 15% in 2020, while online syndications increased. And it doesn’t show signs of slowing down. The real estate crowdfunding market is estimated to increase at a compound annual growth rate (CAGR) of 58.3% from 2020 to 2027.
The entire real estate purchasing experience is changing. From digital walkthroughs to virtual notaries to financing, the experience is going online — increasing the convenience and money savings for buyers and sellers alike.
Not up to speed on the whole online real estate investing movement? Let’s get you up to speed real quick — then, we’ll show you a game-changing way to transform your rental properties for massive investment benefits.
What Does Investing in Real Estate Online Look Like?
Investing in real estate used to be an entirely in-person experience. You might find listings on Zillow, but you’d eventually physically walk through the properties and end up in a conference room with a dozen people and stacks (on stacks) of documents to sign come closing time.
Not anymore.
Now, you can complete just about every step of the home acquisition or selling process from the comfort of your home. While the rest of the world has been making a more gradual shift online, the pandemic was a catalyst for this real estate movement — and it looks like it’s going to become the new normal even after everything has settled down.
Investing in real estate online comes in many shapes and sizes:
Real Estate Investment Trusts
REITs let you invest in real estate without actually owning a physical piece of property. Instead, you purchase shares in a private or publicly traded REIT that owns a diversified portfolio of commercial real estate properties. This lowers your risk while giving you a low-cost way to grow your investment fund.
Online Real Estate Investing Platforms
Another way to invest in real estate is to act as a financer. Investment platforms connect real estate developers with investors who’ll trade cash for equity in the project or will provide a loan to the developers. There’s a fair bit of risk with this type of investment strategy, but there is high return potential, too. Oftentimes, you’ll need to make a lot of money to qualify for these investment platforms.
Purchase a Rental Property
Companies like Nomad and Renters Warehouse help you find the perfect rental properties for your long-term investment. They’ll help you find and purchase the property, lease it to tenants, and even manage the nitty-gritty work. You’re essentially finding renters to help pay the mortgage while your property appreciates in value. You can complete this entire process without ever leaving your home.
Another Way: Exchange Your Investment Rental Property With Flock
With Flock, you can trade your already owned rental property for shares in a portfolio of homes that is managed professionally. You get consistent quarterly income, and your investment continues to appreciate with the portfolio. You don’t have to worry about traditional ownership struggles (marketing, tenants, rent collection, compliance, etc.), and you don’t need to worry about diversification — Flock takes care of all of that for you.
Plus, you don’t trigger a taxable event when you trade your property for ownership in Flock. That’s because the 721 exchange used defers your taxes and spreads out your payments — helping you save more money from your investment in the long run.
Learn how it all works in this detailed walkthrough here.
The future of real estate investments is online, and you can get started right now. All you need is your phone and an internet connection — and you’re good to go.
